Schools in America are faced with increasing demands and diminishing resources. Rapid social change, increasing diversity, and demands for accountability characterize the education landscape. Schools are expected to change to meet new needs of society and the workplace. At the same time these schools have limited resources to apply to meet these new demands. Support from public sources is not likely to be sufficient to provide the resource base necessary to create and operate the schools of the future. It is, therefore, incumbent on schools throughout the nation to look for sources of funding to supplement those received from public sources or from tuition income raised to support private schools.

Increasingly, school districts and private schools across America are turning to foundations. Education foundations are "privately operated, nonprofit organizations established to assist public schools" (and private schools) and who qualify as charitable organizations, "different from school districts, public institutions or local governments" (Clay, Hughes, Seely, & Thayer, 1985, p. 1). Foundations are involved in three main activities: raising, handling, and redirecting money. A public school foundation "is designed to augment, supplement, or complement programs and activities currently being provided by the district" (McCormick, Bauer, & Ferguson, 2001, p. 2). Currently in the United States there are over 4,800 school foundations (McCormick, et al., 2001). They have their own board of directors and their own staff, both paid and volunteer. A foundation mainly provides for what a school district falls short to cover; however, in some cases, foundations help cover basic educational expenses. De Luna (1998, p. 385) notes that local school foundations are "the hottest fund-raising trend in public education." Locally funded and operated, education foundations emerged during the 1980s -- particularly in states like California, Massachusetts, and Oregon, with voter-approved property tax limitation measures.

Foundations are "popping up all over the country," says Howie Schaffer, a spokesperson for the Public Education Network, a national association of local education funds, based in Washington DC (Chmelynski, 1999, p. 2), "Shrinking tax revenues, budget cuts, a shift of state funds to poor districts, a fear of losing students to private schools, and parents' rising expectations of what their children deserve are factors fueling the explosive growth of school foundations" (Chmelynski, p. 3).

Nationally, foundations are found in all types of schools and vary greatly in size. The average amount raised by most school foundations is only about .3% of a typical district's budget.

Similarly the utilization of funds varies greatly. A 1995 study of school foundations conducted by Carol Merz, Dean of the School of Education at the University of Puget Sound in Tacoma, Washington, and Sheldon S. Frankel:

"...found those that raise less than $10,000 annually, usually provide mini-grants and scholarships. Foundations that raise $20,000 to $50,000 a year tend to fund curriculum enrichment programs, teacher training, and teacher resources. And those that raise more than $100,000 annually often underwrite teaching positions." (Chmelynski, 1999, p. 6, 7)

Rather than raising monies to replace public dollars, some school foundations stress systemic reform, working in "policy areas, such as school governance, school finance, educational leadership, and curriculum and assessment" (de Luna, 1998, p. 386). They also try to re-engage citizens and recapture financial support for education. A common question arises: How much money will make a difference? McCormick et al. (2001) answer that $20 per student can have an impact and an extra $20 can produce a change in education.

Literature Review and Research FindingsThe success of school foundations is well documented in California. In 2000, California school foundations raised more than $30 million for public schools, impacting more than 3.5 million children. Additionally, more than 3,500 community volunteers served on the boards of school foundations (California Consortium of Education Foundations, 2001).

"The emerging view is that the number of school foundations is growing and school foundations are providing districts with more flexible funding" (Zimmer, Krop, Kaganoff, Ross, & Brewer, 2001, Appendix D, Study Results, p. 1). While there may be some indication that school foundations may lead to greater inequities between wealthy and poor districts, it has been argued that school foundations actually help close the gap between higher-income and lower-income districts (Zimmer). Crampton and Bauman (1998) did find that entrepreneurship activities, such as developing school foundations, did increase per pupil spending and led to inequities. Merz and Frankel (1995) found that the number of nonprofits did not differ much across economic communities (cited in Zimmer, et. al., 2001). Studies by McLaughlin (1988) and Brown and Rinehart (1991) suggest that most school foundations raise small amounts of money and therefore are more effective as public relations tools than revenue-raising mechanisms.

Steps in Developing School FoundationsThe literature is clear that careful planning is essential to the establishment of a foundation. Determining the need for a foundation in the community, assessing the real level of giving, identifying donors, engaging initiators who have relevant experience in evaluation and fundraising, clarifying the scope of education to be served, defining the purpose of the foundation, and developing objectives that are the expression of purpose in specific terms are critical steps in planning (Clay et al., 1985).

The Internal Revenue Service (IRS) views education foundations as tax-exempt organizations under section 501(c)(3) of the Internal Revenue Code. State laws must be investigated before forming a foundation and foundations should not start fundraising until tax exempt status is granted both for the foundation and its donors (Clay et al.,1985).

Fundraising GuidelinesThe funds acquired as donations can be unrestricted (the foundation board decides how to use them) or restricted (the donor specifies the way he/she wants the funds to be used), recurring (one can donate on a regular or a predictable basis) or non-recurring (the donation will not be repeated for a long time or at all) (Grace & Wendroff, 2001).

Fundraising activities can range from art projects, athletic events, auctions for students' services, book and craft fairs to Christmas cards, calendars, yearbooks and school symbols (Clay et al., 1985). Muro (1995) suggests a new and challenging approach to fundraising:

"[...] your first task as a fund raiser is to forget the need approach to soliciting private funds. Your school district is not a problem, and you are not seeking funds to shore up a sagging curriculum or poor athletic field. Your school, and you, as a fundraiser, are the ones who provide solutions to society's problems."

Thus, the donation is no longer charity, but an investment.

"People who provide support...do not want to contribute to programs and activities that are perceived as problems. In the larger sense, the request for support for a project should be addressed in terms of an opportunity (p. 51)."

Muro (1995) further suggests that a volunteer who solicits a peer is more likely to be successful than a paid professional person. In this case the solicitor and the prospective donor have a similar financial status, which facilitates the process. Donors need to see the donation as an investment in quality education. He considers face-to-face solicitation more effective than telephone and mail soliciting. Planning is essential to fundraising.

The literature suggests that fundraising should apply the principle of proximity (those closer to the school or the foundation) are more likely to donate (McCormick et al., 2001; Muro,1995). Thus, we can involve the members of the school staff, administrators, board members, parents, alumni, major donors, and businesses, any of the school district business partners. Outside the school district, regional and national corporations can become allies.

Grace and Wendroff (2001) identify practices that could improve the relationship between the donor and the foundation the donor has dealt with. The donor should be given the opportunity to reinvest in a program if both parties consider that program worthwhile. Donors need to be informed on the impact their gift had. Foundations shouldn't just assume that a donor would not want to be contacted again. The foundation must cultivate the relationship with its donors through frequent relevant feedback. Feedback includes:

Program brochures.

Donor recognition events.

Volunteer recognition events.

Newsletters.

Web sites.

Program proposals for new funding based on the successful investment of previous funding.

Board meeting presentations by program staff who have benefited from the funding (p.161).

School board-controlled foundation -- all foundation directors are appointed or controlled by the Board of Education.

Autonomous foundation board -- the foundation board is entirely separated from the school board; the school doesn't need to give its approval to the changes the foundation board may want to operate.

The embedded model -- the foundation is a separate, autonomous corporation. As members of the foundation board, school administrators represent the school's interest. Changes need to be approved unanimously by the school board representatives and the other members of the foundation board.

While deciding on the type of board that will be most appropriate for the foundation, the relationship between the foundation and the school or the school district must be envisioned.

The basic format of a board includes a chairman, a president, a vice-president, a treasurer, and a secretary.

The board must be able to:

Understand the needs of the school. In order to determine the school or the school district needs suggests looking at education programs, financial data (the local budget for education), external environmental factors (inflation, demographic changes); and

Findings on Foundation LeadershipThe Public Education Network Study on Local Education Foundation Leadership (Raphael & Anderson, 2001) revealed a number of findings:

If school foundation executive directors had control over their time, they would focus more time on strategic planning.

School foundation executive director leadership can best be described by a community collaborative model of leadership.

School foundation leadership is likely to be a strong factor in the development of public capital.

Some evidence pointed to a need on the part of executive directors for increased understanding of how to develop a board's autonomy.

SummaryPerhaps never before in recent history have economic conditions in states across the nation been so stressed. Such conditions have put added pressures on public schools receiving reduced state support or private schools that may have had to limit or curtail tuition increases.

Local school foundations may provide financial assistance that improves education at the local level. Developing and sustaining successful foundations require expertise, community support, strong school-community relationships, and common commitment.

Crampton, F. E., & Bauman, P. (1998). A new challenge to fiscal equity: Educational entrepreneurship and its implications for states, districts, and schools. Paper presented at the American Educational Research Association, San Diego, CA.